What to expect on Bursa Malaysia today

BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:

Inter-Pacific Research

The FBM KLCI lost further ground yesterday as glove maker stocks continue to retreat after the country’s COVID-19 vaccination roadmap was unveiled.

In addition, the weaker Industrial Production Index (IPI) reading for 2020 and higher unemployment rate also contributed to the key index bucking the region’s mostly positive trend.

Conditions in the broader market, meanwhile, was mixed. As a result, market breadth also stayed negative, even as traded volumes gaining slightly.

With overall sentiments remaining guarded, we think the prospects for a near-term rebound is still tepid as most players are still on a wait-and-see mode.

At the same time, we think that fresh buying will be limited ahead of the Lunar New Year break at the end of the week, while the upcoming gross domestic product (GDP) report could also see a steeper-than-expected contraction in 4Q 2020’s economic activity.

As such, the key index is likely to continue drifting with the downside bias still intact for the time being. A bounce, if any, is likely to be mild and could be limited to the near-term hurdle at the 1,580 level.

Beyond that, the other resistances are at 1,590 and 1,600 respectively which we believe are still distance targets for the time being. The supports, on the other hand, are now located at 1,566 and the psychological 1,550 level.

Malacca Securities Research

As the local bourse saw cautious trading sentiment ahead of the Lunar New Year celebration, investors may continue to reduce their exposure in the stock markets.

Meanwhile, with the National COVID-19 Immunisation Plan came closer, and the daily cases stayed within the below the 4,000 mark for the fourth day running, investors may point towards recovery play moving forward.

Also, Brent oil price has surged above the US$60 level which may set a positive tone on the local front.

The FBM KLCI erased its intraday gains to close below the EMA120 level. Indicators turned mixed as the MACD Histogram has extended another green bar while the RSI remained below 50.

The FBM KLCI may continue to trade range-bound with resistance located around 1,600-1,610, while the support level is found at 1,560 followed by 1,550. – Feb 9, 2021

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